The story begins in Rivet Town with Herb Copperbottom (Stanley Tucci), a dishwasher at Gunk's Greasy Spoon diner, racing through the streets, elated that he is going to be a father. He and his wife, Lydia Copperbottom (Dianne Wiest), after 12 hours of "labor," finally manage to construct the baby. His name is Rodney Copperbottom (Ewan McGregor), and he becomes a young inventor who dreams of making the world a better place for everyone. Rodney idolizes Bigweld (Mel Brooks), a master inventor and owner of Bigweld Industries.

When Rodney comes of age, he invents a gadget, "Wonderbot", intended to help his father clean the dishes at the restaurant, but when Herb's boss, Mr. Gunk (Dan Hedaya), unexpectedly confronts them, Wonderbot goes haywire (a running gag in this film) and breaks dishes, infuriating Gunk and putting Herb in debt.

Rodney decides to take his invention to Robot City to see Bigweld and get a job as an inventor at Bigweld Industries, so that he can help his father pay back Mr. Gunk. He's encouraged by his father, who confides that he's always regretted not pursuing his dream of becoming a musician.

Rodney arrives in the big city and is thrown together with Fender (Robin Williams), a ramshackle robot who is trying to scrape by taking souvenir photos and selling maps to the stars' homes. After a spectacular but harrowing ride on the crosstown express, Rodney arrives at the gate of Bigweld Industries.

However, he learns that times have changed: Bigweld has retired, new inventions are no longer wanted, and his greedy replacement, Ratchet (Greg Kinnear), is about to discontinue the manufacture of spare parts. Ratchet believes the company can make a bigger profit if it stops making spare parts for older robots and instead focuses on selling sleek-looking but expensive upgrades. If the robots refuse to buy the Upgrades they are picked up by mechanical "Sweepers" and sent to the underground Chop Shop, where they're shredded and melted down by Ratchet's mother, Madame Gasket (Jim Broadbent).

Thrown out by Ratchet, Rodney ends up sharing quarters with Fender at Aunt Fanny's (Jennifer Coolidge) low-rent boarding house, along with an assortment of other "Rusties" — older robots threatened with the Chop Shop. When the news gets out that spare parts have been discontinued by Bigweld industries, Rodney remembers Bigweld's slogan, "See a need, fill a need", and begins fixing old robots on his own. Of course, this poses a threat to Ratchet's scheme to sell upgrades instead of repair parts. When Ratchet's mother orders him to stop Rodney and kill Bigweld, the fireworks begin.

Rodney receives a letter saying that his father Herb is ill, and is having trouble finding replacement parts. In desperation, Rodney decides to try to contact Bigweld directly, in order to beg him to restart the manufacture of spare parts. Wonderbot reminds him that the annual Bigweld Ball takes place that night at 8:00 p.m., and Rodney decides that this is his chance to see Bigweld face to face.

In order to get in, Rodney and Fender go to the ball in disguise, only to hear Ratchet announce that Bigweld was unable to attend. Rodney confronts Ratchet, but is waylaid by security robots. He's saved by Cappy (Halle Berry), a beautiful robot-executive of the company who does not like Ratchet's scheme, and together with Fender and the latter's new girlfriend, Loretta Geargrinder (Natasha Lyonne), they escape from the ball.

Fender walks Loretta home and then joyously dances to the tune of "Singing in the Rain" (renamed "singing in the oil"). As he rejoices that love has turned his life around, a sweeper swallows him and takes him to the Chop Shop. That scene is a reference to the Clockwork Orange. In the Chop shop he struggles to escape being melted down, losing the lower half of his body in the process.

Meanwhile, Rodney and Cappy fly to Bigweld's home, familiar from the Bigweld TV show that Rodney watched as a boy. The place seems to be deserted, but while searching for Bigweld, Rodney accidentally knocks over a domino. This triggers a falling-domino sequence that builds from small, Rube Goldbergesque devices to dominos forming a giant image of Bigweld to a succession of increasingly large dominos tipping over.

As the last and largest domino slams into the floor, it triggers a tidal wave of smaller dominoes. Rodney and Cappy find themselves caught up in the wave, only to discover Bigweld himself surfing on a domino. Rodney tries to convince Bigweld to return to the helm of his company and once again make spare parts available, but Bigweld is uninterested. He tells Rodney to give up, because there's no point in trying to fight Ratchet and if Ratchet manages to kill Bigweld he would already have beaten Rodney: "If he beat me, he's gonna beat you."

Disappointed, Rodney and Cappy leave Bigweld alone with his dominoes and head for the train station. Rodney calls his parents, intending to give up his ambition of becoming an inventor and return to Rivet Town, but his father once again encourages Rodney to pursue his dreams. Aunt Fanny and the other Rusties turn up, and Rodney talks them into fighting back against Ratchet's skulduggery. Fender, who has managed to escape from the Chop Shop by donning a pair of female legs scavenged from the junkpile, appears and tells them that Ratchet has built a fleet of super-sweepers with the intention of rounding up and destroying all older robots. At the last minute, Bigweld himself appears and joins the group; his encounter with Rodney has caused him to have a change of heart.

The group heads for Bigweld Industries in Bigweld's limo, and Bigweld goes to the boardroom to confront Ratchet alone. He tells Ratchet he's fired, but Ratchet beats him senseless. Rescued by Rodney and Cappy, a now-deranged Bigweld carries off as Rodney attempts repairs. Pursued by Ratchet in a large mono-wheeled magnetic lifter, he struggles to repair Bigweld's brain as Cappy, in another lifter, fights to keep them both out of Ratchet's clutches. Bigweld is restored to sanity just as they enter the Chop Shop. A climactic battle ensues between the two Gaskets and their Chop Shop employees on one side and Bigweld, the Rusties, and all the other old robots that Rodney has repaired on the other.

When Gasket and Ratchet are gradually winning the battle, Rodney rescues Bigweld from being melted down, the choppers and sweepers are destroyed, Wonderbot tosses Madame Gasket into the melter, and Ratchet loses his upgrades, joining his ineffectual father, who has been hanging from the ceiling by chains throughout the film. Ratchet is left hanging up with his father and losing his Upgrades.

Bigweld goes to Rivet Town to tell Rodney's parents that their son is now his right-hand inventor and eventual successor. Rodney makes his father's dream come true by giving him a three-bell trumpet, and the whole crowd dances to James Brown's "Get Up Offa That Thing" as a victory celebration.

The film received favorable reviews from critics. The review aggregator Rotten Tomatoes reported that 63% of critics gave the film positive reviews, based on 172 reviews. Metacritic gives the a score of 64%, based on 33 reviews.

Most critics liked the visual style and gags but panned the predictable story.[citation needed] The film was nominated for many awards in the category of best animated film, as well as awards for character design, best animated character, voice casting, and sound editing. However, it only won one, the MTV (Mexico) Movie Award for best song, "Un Héroe Real".